site.bta Energy Regulator Says Public Obligation Component of Electricity Price May Be Lowered

Energy Regulator Says Public Obligation Component of Electricity Price May Be Lowered

Sofia, February 24 (BTA) - The public obligation component of the electricity price may be reduced from the beginning of April because of the cheaper natural gas, Energy and Water Regulatory Commission (EWRC) Chairman Ivan Ivanov told journalists.

According to initial Bulgargaz forecasts, the price of natural gas effective in the second quarter of the year will be by 20.64 per cent lower, or 321.87 leva per 1,000 cu m exclusive of VAT and excise duty. The reduction in the price is attributed to the expected lower delivery price of natural gas. The price of natural gas has a direct impact on highly-effective electric power, which is part of the preferential prices forming the public obligation fee, Ivanov explained.

The fee may be reduced as of April 1, it may be reduced as of June 1, or maybe even twice, but that will be with a much lower percentage, Ivanov said. According to legislation, the change should be once a year, and that from July 1. There are exceptions and the law also provides opportunities for revision every quarter, but this is not the good practice in EU regulators with which EWRC is in constant contact, he commented.

Ivanov is deeply convinced the good variant is for the Commission, accumulating the ongoing changes in the price of natural gas, to come out with a pronouncement on June 30, when there will be a considerably larger financial reserve for a clear EWRC attitude in respect to the price.

Ivanov expressed expectations that the downward trend of natural gas prices will continue in the third quarter of the year as this morning the price of raw oil was 33 dollars a barrel and that is a price-forming factor for the value of natural gas in Bulgaria, in turn determined by EWRC on the basis of the preceding nine-month period.